“The problem with real estate is that it’s local. You have to understand the local market,” — Robert Kiyosaki, Investment Guru & author of ‘Rich Dad, Poor Dad.’
Real estate, like any other investment, goes through its cycle of high and low demand. While economic factors like the global economy affect the demand worldwide, more often than not, real estate prices depend on population, income, affordability and market conditions at individual locations. To understand the trends in the New Zealand market, an understanding of both macro and micro factors locally is paramount.
Present Market Outlook
According to the latest data released by the state-owned valuer Quotable Value, property prices have been down by 0.3 percent in the last three months, and the national average value is $675,680. In the previous quarter, property prices have declined in five regions. The overall annual increase is 4.7 percent, adjusted for inflation.
The loan to value restrictions placed by the central bank and the government has reduced the availability of funds. With funds declining, the investor demand and hence the competition for properties has taken a hit.
The property prices are now cooling down and settling. However, the sellers are having a hard time accepting them, and many are not keen to let go of their properties. Most have been used to seeing the inflated values in the last few years and have set up their expectations higher than what the current market trend dictates. This has considerably slowed down the average time to sell.
The current scenario has created a buyer’s market. As the urgency and competition for properties have decreased, buyers now have more time to research properties and do the due diligence before purchasing, without the rushed fear of losing out on deals. Many property deals are now happening through negotiations instead of auctions as sellers are showing more flexibility to sell their property in a less-than-buoyant market.
Opportunity for growth
According to QV Auckland Senior Consultant James Steele, it always takes time for the vendor’s expectations to adjust after a change in market conditions. While nicely presented homes in sought after areas are still in demand, the premium prices they used to command have not been forthcoming. Steele maintained, however, that with a strong economy and low unemployment rates sustaining, there is little reason for sellers to give in to lower prices just yet.
The good news is, the volume of sales has been steady over the past few months. Improved infrastructures in areas like Christchurch has positively influenced demand for upcoming projects. The growth in suburbs, thanks to their prices being lesser than the city, is clear and these properties are especially appealing to first time home buyers.
Tips for Real Estate Agents
“In real estate, you make 10% of your money because you’re a genius and 90% because you catch a great wave.”—Jeff Greene, Real Estate Tycoon
For real estate agents, the current scenario throws up obvious challenges. While in a rising market, anyone worth their salt can get a deal done and make a profit, stagnant or reducing demand and prices dictate that only the best of best can see deals through successfully and make money. It is essential to amplify the 10 percent genius that Greene mentions, to lessen the dependence on the waves of price trends. Smart real estate agents who use the right tools will always rake in profits because even in less than ideal market situations, deals are happening every day. So, what are these tools that will set the survivors apart?
The Right Information:
In real estate, it is essential to know the right trend An agent who keeps track of the trends and movements in the last seven days will trump another who only focuses on the overall pattern of the previous seven months. Property prices, market situations and buyer/seller sentiments transform and sometimes with little sign beforehand. A small local incident can affect a property price in that location within hours, which a month on month trend chart might not forecast. This is why agents with the local know-how and up-to-date information can present more agreeable points to a buyer and seller and get a deal done. The Oysteer Blog gives the latest New Zealand real estate trends. Exclusive content regarding the market can be accessed on the Client Hub.
In a challenging economy, knowing a higher pool of buyers and sellers can make all the difference between a sold and unsold property. The more buyers an agent can show a property to, the higher are the chances that one of them will like the property and be willing to pay for it. In the same way, the more sellers that an agent knows, the more properties they have to show to customers and the chances of them liking at least one of those property rises.
Integrity and Work Principles:
Self-motivation and making smart decisions are traits shared by the elite real estate professionals. Professional reputation is crucial for a successful career. One should follow work ethics and standards of practice. Consistency and punctuality are essential to ensure that everyone is in the loop and aware of what is going on with his or her selling and buying process.
Maintain a professional approach. A friendly and positive attitude can reassure clients when they seem worried about the time being taken to get the property sold. Professional growth gets enhanced when associates put in a right word. Clients look for an appealing attitude, confidence, honesty and relatability in the sales professional they want to work with.
In a rising and upbeat real estate market, the customers reach out to agents but when the trend seems sluggish, it is the agent who needs to find the buyers. The most effective way to do that in this digital age is to use the power of digital marketing. By utilizing digital marketing, real estate agents can work smarter.
Digital media provides two-way communication unlike traditional media like newspapers, Television and billboards. It enables potential customers to reach out to agents in real time. Digital media connects with existing and new customers and gives an amazing platform to grow the business by targeting an audience’s specific preferences and needs to catch attention and make an impression.
On the cost side, digital and social media ads cost a fraction of more traditional and physical channels like newspapers, banners or door-to-door marketing across the country. A vast majority of the population spends more time on social media platforms than on reading papers, seeing banners and entertaining door-to-door salesmen. This ensures that digital ads and outreach have better chances of getting noticed and attention than traditional marketing channels.
It should be noted however that digital marketing is an industry on its own and with its own experts, just like an agent is an expert in their own field. Teaming up with the right experts will ensure the optimum leverage that the marketing strategy can achieve and reach the widest customer base.